24 April 2013

DBS Bank Charges When Investing in Stocks with CPF

Source

1. S$2.50 per lot when buying or selling, capped at S$25.
2. S$2 per counter every quarter as maintenance fee, minimum S$5.
3. Note that the amounts are before GST, so you need to add 7%.
4. Note that you also have to pay the SGX fees as well.
5. There is also a one-time S$0.50 (w/gst S$0.54) charge by CDP for each transaction

See that when you buy or sell, it's charged by PER LOT, so do not buy those low priced cents-category stocks like e.g. Sheng Siong or Informatics, buy those dollar-category stocks like SingTel, Starhub or DBS, it's all just examples, don't really go buy because I said so, anyway DBS is very expensive now.

And don't buy too many counters, focus on one or two, because the quarterly maintenance is charged by PER COUNTER, you hold 10 counters then you will pay 10 x $2 x 1.07 = S$21.40 per quarter.

1 lot = 1000 shares

Buy example

Buy 4 lots of Semb Corp Industries (U96) at S$4.96 via CPF.

SGX Fees

4000 shares x S$4.96 = S$19840
Commission = S$25
Clearing Fee = S$7.94
Trading Fee = S$1.49
Total Fees with GST = S$36.83

DBS Fees

4 lots x S$2.50 = S$10
Assuming you will hold for one year, note that it will only be charged every quarter but I add it up so that it's easier to see as long-term, S$5 x 4 quarters = S$20
Total Fees with GST = S$32.10

CDP Fees

S$0.50 per CPF transaction.
Total with GST = S$0.54

SGX Fees + DBS Fees + CDP Fees = S$69.47

Sell example

Let's say after one year, you decided to sell 4 lots of Semb Corp Industries (U96) at S$5.50 via CPF.

SGX Fees

4000 shares x S$5.50 = S$22000
Commission = S$25
Clearing Fee = S$8.80
Trading Fee = S$1.65
Total Fee with GST = S$37.93

DBS Fees

4 lots x S$2.50 = S$10
Total Fee with GST = S$10.70

CDP Fees

S$0.50 per CPF transaction.
Total with GST = S$0.54

SGX Fees + DBS Fees + CDP Fees = S$49.17

As you can see, the administrative costs for holding 4 lots of Semb Corp Industries for one year is,
When buying S$69.47
When selling S$49.17
Total is S$118.64

So have you earned any money? Yes if you really managed to sell at S$5.50 one year later.

Total cost for holding 4 lots of Semb Corp for one year =  S$19840 + S$118.64 = S$19958.64

After one year, you sell 4 lots for S$22000.

Since you hold for one year, you will get their dividend, it's between S$150-S$170 per lot so we take the minimum of 4 lots x S$150 = S$600.

Total return = S$22000 + S$600 - S$19958.64 = S$2641.36
Return percentage = S$2641.36 / S$19958.64 x 100 = 13.23%

13.23% for one year, not bad, way higher than what you can get from CPF, but provided IF you managed to sell at S$5.50 a year later, anyway, S$5.50 or more is very much possible.

Me? That's what I'm planning, get 4 lots of Semb Corp Industries with CPF.

2 comments:

John Lim said...

What are the stocks that we can take a look at for using cpf to invest? Shld go for high dividend yield or growth stocks?

marrythaigirlsingapore said...

Hi John,

For the list of stocks which you can invest using CPF, you can refer to this post:
http://marrythaigirlsingapore.blogspot.sg/2013/11/how-to-tell-which-stocks-can-be-bought.html

As for dividend or growth, to me it doesn't matter as long as they bring in profit, either the money still goes back to your CPF. But note that when trading using CPF monies, there is buy and sell charge, for DBS Vickers it is $2.50 (capped at $25) per lot plus $0.50. For other brokers, check first before you buy/sell.